The Central Bank: Positive indicators during the first quarter of 2021 supported by the strong return of economic activities

The risk of credit default for the governments of Abu Dhabi and Dubai, which are the lowest in the region

“Central”: A further decline in premiums for credit risk swaps is expected.

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The credit default risk swaps for the governments of Abu Dhabi and Dubai showed positive indicators during the first quarter of this year, according to data issued by the Central Bank.

In light of this positive performance, the credit default swaps premiums for Abu Dhabi and Dubai are considered the lowest in the Middle East and Africa region.

credit risk

According to international financial standards, credit risk swaps are the premiums paid by lenders to insure against borrowers’ default, noting that these premiums witnessed a further decline globally during the first quarter of 2021 compared to their levels recorded in 2020, as a result of Expanding the easing of restrictions related to the “Covid-19” pandemic.

Dubai

The data issued by the “Central” indicated that the premiums for credit default swaps for the Dubai government decreased by 19.7 basis points, reaching 107.8 basis points during the first quarter of this year, compared to 127.5 basis points in the fourth quarter of last year.

Abu Dhabi

In Abu Dhabi, premiums for credit default swaps amounted to 44.7 basis points during the first quarter of 2021, according to statistics issued by the Central Bank.

The premiums for credit default risk swaps reached high levels, as a result of the conditions imposed by the “Corona” pandemic on all countries.

Support

It is noteworthy that the positive indicators shown by the premiums for credit risk swaps for both the governments of Abu Dhabi and Dubai were supported by a strong return to economic and commercial activities in the country, most of which returned to recording growth rates that preceded the pandemic.

With continued activity across all sectors, a further decline in credit risk swap premiums to repay credit to the governments of Abu Dhabi and Dubai is expected during 2021.

"Youth Dialogue"

On the other hand, the Governor of the Central Bank, Khaled Muhammad Balama, inaugurated the second edition of the "Central Bank Youth Dialogue" initiative, which aims to empower young people and motivate them to adopt innovation and technology, and use it to achieve the goals of the state's strategy for the next 50 years.

In his opening speech, Balama said that the UAE, over the past 50 years, has laid the foundations for the growth and prosperity of its path, embodying the vision of its wise leadership and the aspirations of its people, stressing the Central Bank's endeavor to empower the UAE's youth to actively participate in the country's development process during the next 50 years, and support it in an innovative spirit. And a solid understanding of future technologies.

The Central Bank's awareness of the importance of educating the future generation about their role in achieving the ambitious vision of our wise leadership, and the application of financial technology in achieving this vision.

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